The Massachusetts corporate excise tax in plain terms

Key takeaways

• The Massachusetts corporate excise for a general business corporation is 8.0% of net income attributable to Massachusetts plus $2.60 per $1,000 of taxable tangible property or net worth, according to the Department of Revenue rate table updated December 30, 2025.
• The minimum corporate excise is $456 a year, and the 2025 Form 355 instructions say it cannot be prorated for a short taxable year.
• An S corporation with total receipts under $6 million generally pays only the property or net worth measure (or the $456 minimum); the rate on net income is 2% from $6 million and 3% from $9 million.
• Form 355 for a C corporation is due on the 15th day of the fourth month after the taxable year ends. Form 355S for an S corporation is due on the 15th day of the third month.
• A corporation that expects to owe more than $1,000 in excise for the year must make estimated payments, normally in installments of 40%, 25%, 25% and 10%.
• The automatic six-month filing extension is valid only if the corporation has paid the greater of 50% of the total tax due or the $456 minimum by the original due date.

If you run an incorporated business in Boston or anywhere else in the state, you owe a state tax each year even when the company loses money. The Massachusetts corporate excise tax is a yearly state tax on corporations that do business in Massachusetts, made up of a charge on net income and a charge on property or net worth, with a floor of $456. The state Department of Revenue (DOR) collects it; cities and towns have no part in it.

This guide explains who has to file, how the two measures are calculated, what S corporations pay, when returns and estimated payments are due, and how the extension and late penalties work.

What is the Massachusetts corporate excise tax?

The Massachusetts corporate excise tax is the state’s annual tax on business corporations, set by Chapter 63 of the General Laws and administered by DOR. A general business corporation pays the sum of two parts, usually called the income measure and the non-income measure. If that sum comes to less than $456, the corporation pays $456 instead.

Section 39 of Chapter 63 sets the figures: $2.60 per $1,000 of tangible property or net worth, 8.0% of net income for tax years beginning on or after January 1, 2012, and a minimum of $456.

Who has to file a Massachusetts corporate excise return?

A Massachusetts corporate excise return is required from corporations subject to the state’s tax jurisdiction. DOR’s corporate excise tax guide, updated December 30, 2025, says a general business corporation is typically covered if it owns or uses property in Massachusetts, has employees in the state, or otherwise does business here. A corporation formed in another state can owe the excise too. The 2025 Form 355 instructions treat a corporation with no other contacts as doing business in Massachusetts once it has more than $500,000 in Massachusetts sales.

The return you file depends on the kind of corporation. DOR lists these forms:

• Form 355 for a C corporation filing on its own.
• Form 355S for an S corporation.
• Form 355U for corporations under common control that run a unitary business and must file a combined report.
• Form 355SC for a security corporation.

Limited liability companies are the main exception. DOR’s guide says LLCs are classified for Massachusetts tax purposes the same way they are for federal income tax purposes. An LLC that the IRS treats as a corporation falls under the corporate excise and must register with DOR. An LLC taxed federally as a partnership or as part of its owner’s return does not file Form 355 as a corporation.

How is the Massachusetts corporate excise calculated?

The Massachusetts corporate excise is calculated by adding the income measure to the non-income measure and comparing the total with the $456 minimum. The figures below come from DOR’s Massachusetts tax rates page, updated December 30, 2025, and apply to general business and manufacturing corporations.

Part of the excise	Rate	What it applies to
Income measure	8.0%	Net income attributable to Massachusetts
Non-income measure	$2.60 per $1,000	Taxable Massachusetts tangible property, or taxable net worth
Minimum excise	$456	Owed when the two measures total less than $456

The income measure

The income measure is 8.0% of the corporation’s net income that is attributable to Massachusetts. A corporation taxable in more than one state apportions its income, and the 2025 Form 355 instructions say that for tax years beginning on or after January 1, 2025, the apportionment uses only the sales or receipts factor.

The non-income measure

The non-income measure is $2.60 per $1,000 of either tangible property or net worth, depending on how the corporation is classified. Section 39 applies the rate to tangible property for a tangible property corporation and to net worth for an intangible property corporation. On Form 355, the test is on Schedule B: if line 15 is 10% or more, the corporation completes Schedule C (tangible property), and if it is lower, the corporation completes Schedule D (net worth).

What is the minimum corporate excise in Massachusetts?

The minimum corporate excise in Massachusetts is $456 per return, as listed on DOR’s rate table updated December 30, 2025. The 2025 Form 355 instructions state that a corporation may never pay less than the $456 minimum on a return.

A short first or last year does not reduce the minimum. According to the same instructions, the non-income measure can be prorated for a short taxable year, but the $456 minimum cannot.

How does Massachusetts tax S corporations?

Massachusetts taxes S corporations under the corporate excise at the entity level, on top of the personal income tax its shareholders pay on their shares of the income. An S corporation is a corporation that has elected under federal law to pass its income through to shareholders, and the 2025 Form 355S instructions say any federal S corporation is an S corporation for Massachusetts purposes.

Every S corporation owes the non-income measure of $2.60 per $1,000, or the $456 minimum if that is greater. The income measure depends on size. DOR’s rate table, updated December 30, 2025, lists these rates for S corporations that are not financial institutions:

S corporation situation	Rate on net income
Total receipts under $6 million	No income measure, unless income is taxed to the corporation federally
Total receipts of $6 million or more but less than $9 million	2%
Total receipts of $9 million or more	3%
Net income taxable at the federal level, such as certain built-in gains and passive investment income	8%

Shareholders are taxed on their shares whether or not the money is distributed, according to the Form 355S instructions. The corporation reports each share on a Schedule SK-1.

When is the Massachusetts corporate excise return due?

The Massachusetts corporate excise return is due on the 15th day of the third month after the taxable year ends for an S corporation, and on the 15th day of the fourth month for a C corporation. DOR’s tax due dates and extensions page, updated March 23, 2026, showed 2025 calendar-year returns due March 16, 2026 (Form 355S) and April 15, 2026 (Form 355 and Form 355SC).

Corporations must file returns and pay electronically, DOR’s guide says. Under the 2025 Form 355 instructions, a return that is not filed electronically is not treated as filed on time.

How do estimated payments work for the corporate excise?

Estimated payments for the corporate excise are required when a corporation reasonably estimates its excise for the taxable year at more than $1,000. DOR’s corporate excise estimated payments page, updated January 29, 2026, gives two choices: pay the full estimate by the 15th day of the third month of the taxable year, or pay in four installments.

The standard installments are 40%, 25%, 25% and 10% of the estimated excise. For a calendar-year corporation in 2026, DOR listed the due dates as March 16, June 15, September 15 and December 15, 2026. A new corporation in its first full taxable year with fewer than 10 employees uses a different split: 30%, 25%, 25% and 20%. Payments go through MassTaxConnect, and the worksheet is Form 355-ES.

What happens if you need more time or pay late?

More time to file a corporate excise return is automatic for six months, but only when enough tax has been paid by the original due date. DOR’s due dates page says the corporation must have paid the greater of 50% of the total tax ultimately due or the minimum corporate excise. DOR states plainly that zero extensions are not accepted. Combined report filers get seven months under the 2025 Form 355 instructions.

Two limits apply. An extension gives more time to file and no extra time to pay, so interest runs on any unpaid amount from the original due date. A federal extension from the IRS does not extend the Massachusetts deadline.

Late penalties are separate from interest. The 2025 Form 355 instructions list a penalty for failure to file of 1% of the tax due per month or part of a month, up to 25%, and a penalty for failure to pay at the same 1% per month, also up to 25%.

What should you recheck before you act?

All figures here were checked on November 13, 2026, against the sources named. Confirm these before you file or pay:

• The 8.0% income rate, the $2.60 per $1,000 non-income rate, the $456 minimum and the S corporation rates of 2% and 3%: DOR’s Massachusetts tax rates page, last updated December 30, 2025.
• The $6 million and $9 million total receipts thresholds for S corporations: the Form 355S instructions for the tax year you are filing.
• Return due dates for 2026 calendar-year returns, filed in 2027: DOR’s tax due dates and extensions page. The dates in this guide are the 2026 calendar.
• Estimated payment dates and the $1,000 threshold: DOR’s corporate excise estimated payments page. The 2027 installment dates were not posted on the page read for this guide.
• The single sales factor apportionment rule, the $500,000 sales test and the penalty rates: the Form 355 instructions for your tax year, on DOR’s corporate excise forms page.

This guide is general information, not legal or tax advice. Rules and fees change; confirm the current requirements with the agency named before you file or pay.

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